Hashim now Bank Papan's largest shareholder

Hashim now Bank Papan's largest shareholder

JAKARTA (JP): Businessman Jopie Widjaya has sold one half of
his stake in the publicly-listed Bank Papan Sejahtera to Hashim
S. Djoyohadikusumo, just few months after taking over the stocks
from the bank's founders.

Jopie, who hit newspaper headlines when he took over the
majority stake of the bank in May, said on Saturday that the
transaction was purely a business deal.

"The transaction has nothing to do with the public's
controversy," he said in reference to the public's objection to
his move in taking the controlling stake in the bank, which is
partly owned by Bank Indonesia, the central bank.

The takeover has made Hashim, the son of noted economist
Sumitro Djoyohadikusumo, as the largest shareholder, with a stake
of 19.8 percent.

Jopie, president of the publicly listed Steady Safe, acquired
22.52 percent of Bank Papan's shares from Bank PDFCI and Bank
Papan's other founders through his wholly-owned Infiniti Wahana
in May. But sources said that Jopie had also acquired another 29
percent stake through his affiliated firms, making Jopie the
bank's largest single shareholder.

However, Jopie's unprecedented takeover of Bank Papan had
caused concern in the public, who feared that the new majority
shareholder would divert the bank's main business of mortgage
operations to other consumer banking activities.

On the other side, business analysts felt something wrong
behind the maneuver, given Jopie's not-so-promising financial
condition. Many of them alleged Jopie had illegally used Steady
Safe funds to financing the transactions. In fact Steady Safe, in
which Jopie has a majority, giving him control, raised loans of
approximately US$25 million from overseas banks right before he
pursued the acquisition deal.

In an extra-ordinary shareholders meeting, the bank's
management agreed to retain the mortgage activities as its core
business.

The Capital Market Supervisory Agency and Bank Indonesia have
promised to continue investigating the fairness of Jopie's May
deal despite the consensus.

However, no result of the investigation has been announced.
Jopie has denied the allegations.

"I sold part of my shares in Bank Papan without any pressure
from outsiders," he said when he asked if he had been forced by
the central bank or the capital market watchdog to reduce his
stake in Bank Papan.

"From what I feel, there is no indication that Bank Indonesia
has any objection to my involvement in the bank," he said,
insisting that the sale was made because he needed additional
funds for other business activities.

On top of that, he said, the shares were sold to Hashim and
friends in line with his intention to find a good partner for
developing the bank further.

Hashim

Tunasmas Paduarta, an investment company controlled by Hashim,
purchased a 19.8 percent stake in Bank Papan through the Jakarta
Stock Exchange (JSX) last Friday from Infiniti and other old
shareholders, at an average price of Rp 4,500 per share.

The deal made Tunasmas, an affiliate of Hashim's business
group comprising of PT Tirtamas Majutama, PT Semen Cibinong, PT
Semen Nusantara and PT Trumix Beton, as the majority shareholder
in Bank Papan.

Al Njoo, of the business group, said that the acquisition of
the bank's shares was made to strengthen the group's strategic
investment operations in the financial sector.

"It was simply made to strengthen our strategic investment
activities, rather than an effort to control the ownership of
Bank Papan," he said while promising that Bank Papan's mortgage
operation would be further developed as part of its business
strategy in the financial sector.

The new deal was carried out shortly after the capital market
watchdog announced its plan to issue a tender offer code, a
ruling which will be designed to prevent a hostile takeover of a
publicly-listed company.

Under the planned ruling, existing shareholders are required
to open a tender to the public if the number of shares to be sold
is more than 20 percent of a company's total stocks.

Bank Papan's shares, acquired by Tunasmas Paduarta, were, in
fact, less than 20 percent, but Al Njoo said that the business
group is actually in the position of buying over 50 percent of
the bank's shares in order to benefit from the absence of the
tender offer code.

"So what is your real aim in the takeover of the bank's
shares?," a reporter asked. "We will mainly expand our financial
activities by, for example, controlling the management of Bank
Papan," Al Njoo explained, also saying that the negotiations for
the takeover of Jopie's shares in Bank Papan lasted about one
month.

Tunasmas Paduarta will become the financial arm of Hashim's
business group, which is now involved in cement and coal
production, the petrochemical industry and electricity
generation.

In addition to the banking industry, the business group will
also operate in the securities business, in cooperation with
Merrill Lynch of the United States.

Al Njoo said that the group's forthcoming business expansion
will include the establishment of an olefin aromatic plant in
Tuban, East Java, and the establishment of a insurance company,
in a partnership with a U.S. life insurance firm.

The takeover of Bank Papan's shares further adds to Hashim's
"shares collection" in the banking industry because, besides Bank
Papan, he also partly owns Bank Universal, Bank Pelita and Bank
Industri.

Bank Papan, listed on the JSX and the Surabaya Stock Exchange
last year, is one of the rapidly growing banks in the country.
Its total assets increased sharply to Rp 928.82 billion as of
1994, from Rp 457.55 billion as of 1993; Rp 419.38 billion as of
1992; and Rp 376.27 billion as of 1991.

Its before-tax profits rose to Rp 21.73 billion in 1994, from
Rp 12.54 billion in 1993; Rp 17.34 billion in 1992; and Rp 18.32
billion in 1991. (hen)